Labor Reform Initiative in Mexico to Regulate Digital Platform Workers

President Claudia Sheinbaum on Oct. 16, 2024, signed a labor amendment initiative to the Federal Labor Law (Ley Federal del Trabajo or LFT), aimed at guaranteeing labor rights to workers on digital platforms, such as delivery personnel and drivers. This proposal, promoted by the Ministry of Labor and Social Welfare (Secretaría del Trabajo y Previsión Social or STPS), aims to serve a sector that has grown exponentially in Mexico in recent years.

This governmental commitment addresses item No. 59 of the political agenda presented on Oct. 1, 2024. According to data from the Tax Administration Service (Servicio de Administración Tributaria or SAT), approximately 658,000 individuals rely economically on these platforms, of which around 272,000 earn income equivalent to or greater than the monthly minimum wage. This highlights the importance of this sector as a primary or sole source of income for many workers.

In order to address the needs of this economic sector, multiple meetings have been held with sector representatives since the previous administration, including delivery personnel, key companies and government authorities. In this context, a formal dialogue was set forth this year with collectives such as United Distributors of Mexico (Repartidores Unidos de México), the Union of Workers by Application (Unión Nacional de Trabajadores por Aplicación or UNTA) and Not a Delivery Person Less (Ni un Repartidor Menos) to better understand their concerns and needs.

As a result, the amendment initiative contemplates additions to the LFT, which include new sections to Articles 49, 50 and 127, as well as the incorporation of a new chapter regulating digital platform work. The key highlights of these additions are:

• Indemnities: Indemnities will be calculated under particular conditions for digital platform work.
• Profit Sharing: Specific provisions are included to ensure workers are considered in the distribution of company profits.
• Employer Responsibilities: Labor responsibility lies with the platform manager, not the users of the services. This implies obligations such as timely payment, registration of effective hours and issuance of weekly receipts.
• Workers' Rights: Workers are guaranteed rights under the law within the digital platform framework.
• Grounds for Termination: There are specific circumstances for terminating employment relationships without liability to the employer.
• Social Security: Platforms must register workers in the Mexican Social Security Institute (Instituto Mexicano del Seguro Social or IMSS) and provide contributions to the National Workers' Housing Fund Institute (Instituto del Fondo Nacional de la Vivienda para los Trabajadores or INFONAVIT), although those below the minimum wage will not be subject to these obligations but will retain other rights.
• Algorithmic Management Policy: Companies must have clear policies on the use of algorithms that affect task assignments and provide information on how these policies impact the functions of users who derive economic benefit.
• Workers' Obligations: Workers must comply with safety and health standards.
• Prohibitions for Companies: It is prohibited for companies to charge workers for registration or other fees, as well as to unjustifiably restrict access to the platform, thereby protecting workers' rights.
• Gender Perspective: Digital platform companies must adopt a gender perspective, ensuring workers are protected from acts of discrimination and harassment.
• Regulation of Work Time/Flexibility: The time a worker dedicates to the platform will be determined by the worker, allowing for autonomy in managing their working hours.

The initiative was submitted to the Legislative Branch for discussion, with the aim of improving working conditions in this sector, the challenge will be to avoid compromising the flexibility that defines the business model.

Our team of attorneys in labor and social security matters is available to provide the necessary advice and help companies adapt to these recent proposals and legislative changes. If you would like to obtain more information or updates on topics, criteria and approaches related to this area, please contact the authors.

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